We can sympathize to a certain extent. Depending on where you live and how big your family is, it is sometimes true that households with $250,000 still have to plan carefully. (But they shouldn’t forget that they are in the top 2% of American households.)

However, among multimillionaires who make an average of $78 million—including two billionaires—“most do not consider themselves financially secure; for that, they say, they would require on average one-quarter more wealth than they currently possess,” said The Atlantic Monthly.

Why do the insanely rich feel poor? There are a few reasons for this extreme financial dysmorphia.

The Allure of the Middle Class

In the Gallup survey on taxes, 67% of those from households making $250,000 or more thought their taxes were too high. But when asked about “upper-income people,” only 38% of this same group said upper-income people paid too much in taxes. This means at least three in ten from households making $250,000 or more did not realize that they are upper-income.

One reason might be what this New York Times blog post calls “the Middle Kingdom effect.” This group knows they make more than the poor, but they also see people who are much wealthier, particularly in the media. They therefore conclude that they are in the middle, and therefore middle-class.

You can buy food, but not appetite; medicine, but not health; soft beds, but not sleep; knowledge but not intelligence; glitter, but not comfort; fun, but not pleasure; acquaintances, but not friendship …. —Arne Garborg

The Stress of Retirement

The rich may also not appreciate their literal good fortune because of a universal worry: retirement. In the Fidelity survey, the 42% of millionaires who said they did not feel wealthy were, on average, closer to retirement, so they were likely feeling the stress of maintaining their lifestyle without working.

Keeping Up With the Joneses

As the moneyed ascend the food chain, they begin to fear that “friends” want more than just friendship, so they begin hobnobbing with others on Easy Street. But if you merely have $25 million and are vacationing with a family swimming in $50 million, not only are they twice as well-off—they have an extra $25 million to toss around. And you will feel the need to keep up.

Craving a Higher High

The affluent might also not be content because of our pesky human tendency to adjust to what we have. If you’ve been flying in your private jet with the gold seat belt buckles for the last decade, it’s no longer exciting. In fact, it feels downright old.

We splurge for the boost we get (learn how to do it right). But if life is just one opulent luxury after another, then that becomes normal, not special. That’s why your parents worried about “spoiling” you as a kid—too many indulgences will spoil all the rest.

Golden Handcuffs

It’s a basic principle that people spend what they earn, no matter how much it is. According to the book Richistan, in 2004, a fifth of households with $1 million to $10 million in assets spent all their income or more.

A common scenario: a 20-something corporate lawyer buys an apartment with her first-year savings. Whether or not she likes her job, she has to stick with it in order to pay the mortgage and buy furniture. Year after year, as she makes more, she doesn’t put all the extra earnings into the bank—she gets a new car, a vacation timeshare, etc. All these require her to stay in her job to afford them (the “golden handcuffs”). It’s a vicious cycle: more income feeds a pricier lifestyle, which requires more income.

Super-size this story-line, and it’s plausible that a millionaire with three homes and four cars can actually feel financially strapped.

What Money Can’t Buy

While all these factors contribute to the warped view the rich have of themselves, we think something more fundamental is at play.

In the Boston College survey, many of the multimillionaires were not only insecure about their wealth. They were also insecure about some of the foundational needs of life, such as love, career—even self-worth. For instance:

Love: It sounds cliched, but it’s true: The well-to-do often wonder whether they are loved for themselves or for their money. The Atlantic Monthly writer says disclosing one’s wealth during dating seems “as fraught as telling your date you have herpes.”

Career: Those born into money (dubbed by Warren Buffett “the lucky sperm club”) don’t have to do what most people do—work. A job not only fills one’s days, it provides a feeling of purpose and a measure of success. But often, wealthy people who work are seen as taking away jobs that others need or as putting on a charade.

Self-worth: Heirs are born under the shadow of their parent’s triumphs. Many spend their lives wondering whether they’ll achieve anything on their own.

At the end of the day, the rich probably don’t feel rich because of the things money can’t buy.

Tell us: What does it take for you to feel wealthy or secure? Is it having a certain amount in the bank? If so, what amount? If not, what is it?

For me to be secure, I want my family to be able to afford to pay all our month’s bills, groceries, money to save up, and still have a little behind. I want to be able to have health insurance. I don’t want a lot of money, but just enough to not have to keep worrying about how I am going to pay the month’s bills AND by groceries at the same time.

http://pulse.yahoo.com/_S2XQDFDJUMDKIHVSNKZAX63RX4 MiraG

For me to be secure, I want my family to be able to afford to pay all our month’s bills, groceries, money to save up, and still have a little behind. I want to be able to have health insurance. I don’t want a lot of money, but just enough to not have to keep worrying about how I am going to pay the month’s bills AND by groceries at the same time.

Woodwigs25

“..give me neither poverty nor riches: feed me with food convenient for me, Lest I be full and deny you and say, Who is the Lord? Or lest I be poor, and steal, and take the name of my God in vain.” Proverbs 30: 8,9. I’ve always thought this was a pretty realistic outlook. Be reasonable.

Woodwigs25

“..give me neither poverty nor riches: feed me with food convenient for me, Lest I be full and deny you and say, Who is the Lord? Or lest I be poor, and steal, and take the name of my God in vain.” Proverbs 30: 8,9. I’ve always thought this was a pretty realistic outlook. Be reasonable.

Woodwigs25

“..give me neither poverty nor riches: feed me with food convenient for me, Lest I be full and deny you and say, Who is the Lord? Or lest I be poor, and steal, and take the name of my God in vain.” Proverbs 30: 8,9. I’ve always thought this was a pretty realistic outlook. Be reasonable.

Woodwigs25

“..give me neither poverty nor riches: feed me with food convenient for me, Lest I be full and deny you and say, Who is the Lord? Or lest I be poor, and steal, and take the name of my God in vain.” Proverbs 30: 8,9. I’ve always thought this was a pretty realistic outlook. Be reasonable.

Woodwigs25

“..give me neither poverty nor riches: feed me with food convenient for me, Lest I be full and deny you and say, Who is the Lord? Or lest I be poor, and steal, and take the name of my God in vain.” Proverbs 30: 8,9. I’ve always thought this was a pretty realistic outlook. Be reasonable.

Woodwigs25

“..give me neither poverty nor riches: feed me with food convenient for me, Lest I be full and deny you and say, Who is the Lord? Or lest I be poor, and steal, and take the name of my God in vain.” Proverbs 30: 8,9. I’ve always thought this was a pretty realistic outlook. Be reasonable.

Woodwigs25

“..give me neither poverty nor riches: feed me with food convenient for me, Lest I be full and deny you and say, Who is the Lord? Or lest I be poor, and steal, and take the name of my God in vain.” Proverbs 30: 8,9. I’ve always thought this was a pretty realistic outlook. Be reasonable.

Woodwigs25

“..give me neither poverty nor riches: feed me with food convenient for me, Lest I be full and deny you and say, Who is the Lord? Or lest I be poor, and steal, and take the name of my God in vain.” Proverbs 30: 8,9. I’ve always thought this was a pretty realistic outlook. Be reasonable.

Woodwigs25

“..give me neither poverty nor riches: feed me with food convenient for me, Lest I be full and deny you and say, Who is the Lord? Or lest I be poor, and steal, and take the name of my God in vain.” Proverbs 30: 8,9. I’ve always thought this was a pretty realistic outlook. Be reasonable.

Woodwigs25

“..give me neither poverty nor riches: feed me with food convenient for me, Lest I be full and deny you and say, Who is the Lord? Or lest I be poor, and steal, and take the name of my God in vain.” Proverbs 30: 8,9. I’ve always thought this was a pretty realistic outlook. Be reasonable.

Woodwigs25

“..give me neither poverty nor riches: feed me with food convenient for me, Lest I be full and deny you and say, Who is the Lord? Or lest I be poor, and steal, and take the name of my God in vain.” Proverbs 30: 8,9. I’ve always thought this was a pretty realistic outlook. Be reasonable.

Woodwigs25

“..give me neither poverty nor riches: feed me with food convenient for me, Lest I be full and deny you and say, Who is the Lord? Or lest I be poor, and steal, and take the name of my God in vain.” Proverbs 30: 8,9. I’ve always thought this was a pretty realistic outlook. Be reasonable.

Woodwigs25

“..give me neither poverty nor riches: feed me with food convenient for me, Lest I be full and deny you and say, Who is the Lord? Or lest I be poor, and steal, and take the name of my God in vain.” Proverbs 30: 8,9. I’ve always thought this was a pretty realistic outlook. Be reasonable.

Woodwigs25

“..give me neither poverty nor riches: feed me with food convenient for me, Lest I be full and deny you and say, Who is the Lord? Or lest I be poor, and steal, and take the name of my God in vain.” Proverbs 30: 8,9. I’ve always thought this was a pretty realistic outlook. Be reasonable.

Woodwigs25

“..give me neither poverty nor riches: feed me with food convenient for me, Lest I be full and deny you and say, Who is the Lord? Or lest I be poor, and steal, and take the name of my God in vain.” Proverbs 30: 8,9. I’ve always thought this was a pretty realistic outlook. Be reasonable.

Woodwigs25

“..give me neither poverty nor riches: feed me with food convenient for me, Lest I be full and deny you and say, Who is the Lord? Or lest I be poor, and steal, and take the name of my God in vain.” Proverbs 30: 8,9. I’ve always thought this was a pretty realistic outlook. Be reasonable.

SereneSeeker

Financial security comes not in wealth, but faith, that He who is the source of all riches, will continue to prosper my work and will always meet my needs. The Lord may not see fit to satisfy all my desires, but He will absolutely meet every need.

Natasia

A few details that were left out of this article:

1. Inflation is currently reported at 4% but is actually running between 7% and 10% when you take into account all the things people have to buy, such as gas, health insurance, etc.
2. Nobody is making any interest on their savings, so if you have money in a savings account you’re actually losing money. The only other options are hedging for inflation by investing in commodities such as gold, or making riskier investments such as stocks in the hopes of keeping up with inflation (which isn’t advisable for those who are nearing retirement).
3. Not to mention the current value of the dollar.

Additionally, the people interviewed in this study could very well be among those that fear the US will go the way of the Weimar Republic and we’ll need to cart wheelbarrows filled with $100 bills to the store to buy bread. (I on the other hand am more of an optimist.)

The other issue is that if people are retired, nearing retirement or not making as much as they used to, they are dipping into their principle to maintain property, keep their kids in college, etc. Regardless of whether you have $200,000 in savings or $20 million in savings, if you’re pulling money out of your savings you don’t feel like you have enough money.

Ceili999

I grew up in a rich family. What I know about that is 1) fortune is generally a risky thing with much more accounting to deal with; 2) people are not always as trustworthy as you would like them to be (my cousin was dumped when her dad lost his millions!) I think of that as “heiress syndrome,” and 3) in the US, expenses tend to exceed available income by 10%. I had a career and when I retired carefully lowered my expenses by 42% so it would be easy. There are times (as now, when I’m looking at non-elective surgery) that I get anxious about income/expenses and blah blah blah, but mostly I feel infinitely richer than in heiress days…

Mugsylee

To find joy, give something away whenever you find yourself becoming greedy or grasping. It’s amazing how much the “stuff” we live to possess (and impress) clogs up our values and our lifestyles. My greatest treasures are letters and drawings I receive from the foreign children my husband and I sponsor. We don’t earn a lot, but helping these kids grow up healthy and educated makes me feel like a philanthropist. Try it!

Mugsylee

To find joy, give something away whenever you find yourself becoming greedy or grasping. It’s amazing how much the “stuff” we live to possess (and impress) clogs up our values and our lifestyles. My greatest treasures are letters and drawings I receive from the foreign children my husband and I sponsor. We don’t earn a lot, but helping these kids grow up healthy and educated makes me feel like a philanthropist. Try it!

My grandmother used to say “enough is as good as a feast.” Having raised five children through the Great Depression and early years of WWII she knew what she spoke of. My grandfather was an auctioneer in those days (and later) and told me they’d get great crowds at auctions – everyone wanted to see whose household was up for bids, and who had money to spend – but he said you could shake the whole crowd by the heels and not get $5 from the bunch. Most of the good stuff went to Texas as the oilmen were the only ones with that kind of money to spend. Still, if my great-uncle came home from the seminary on the weekend with a couple or three of his friends, my grandmother would throw a few extra potatoes in the pot and slice the meat a little thinner. No one came to her door and went without. How wealthy you feel depends on if basic needs (food, clothing, shelter) are met and bills paid and have a little money set aside for rainy days (more for the unfortunate folks for whom it regularly pours.) Planning, discipline and reasonable expectations make for a much happier life.

http://pulse.yahoo.com/_MW2EXIAATV4TACOIBO3OXLOZMI Scott

My grandmother used to say “enough is as good as a feast.” Having raised five children through the Great Depression and early years of WWII she knew what she spoke of. My grandfather was an auctioneer in those days (and later) and told me they’d get great crowds at auctions – everyone wanted to see whose household was up for bids, and who had money to spend – but he said you could shake the whole crowd by the heels and not get $5 from the bunch. Most of the good stuff went to Texas as the oilmen were the only ones with that kind of money to spend. Still, if my great-uncle came home from the seminary on the weekend with a couple or three of his friends, my grandmother would throw a few extra potatoes in the pot and slice the meat a little thinner. No one came to her door and went without. How wealthy you feel depends on if basic needs (food, clothing, shelter) are met and bills paid and have a little money set aside for rainy days (more for the unfortunate folks for whom it regularly pours.) Planning, discipline and reasonable expectations make for a much happier life.

http://pulse.yahoo.com/_MW2EXIAATV4TACOIBO3OXLOZMI Scott

My grandmother used to say “enough is as good as a feast.” Having raised five children through the Great Depression and early years of WWII she knew what she spoke of. My grandfather was an auctioneer in those days (and later) and told me they’d get great crowds at auctions – everyone wanted to see whose household was up for bids, and who had money to spend – but he said you could shake the whole crowd by the heels and not get $5 from the bunch. Most of the good stuff went to Texas as the oilmen were the only ones with that kind of money to spend. Still, if my great-uncle came home from the seminary on the weekend with a couple or three of his friends, my grandmother would throw a few extra potatoes in the pot and slice the meat a little thinner. No one came to her door and went without. How wealthy you feel depends on if basic needs (food, clothing, shelter) are met and bills paid and have a little money set aside for rainy days (more for the unfortunate folks for whom it regularly pours.) Planning, discipline and reasonable expectations make for a much happier life.

Anonymous

“It’s a basic principle that people earn what they spend, no matter how much it is.” pretty much nails it. Sure, there are people out there who will sock away the extra when their income increases, still maintaining their frugal lower pay lifestyle but is that most people? No…The concept that upper and middle class people spend more merely because they are greedy is too simplistic. I’ve seen people who were poor and just making it had had no debt suddenly become way over their heads in debt when they started to earn a bit more money. Their spending habits changed as they moved up the corporate, union class or other job ladder. Human nature, lack of experience or knowlege in how to handle larger amounts of money and the desire to provide your family with a better life (school/neighborhood/home/activities) sometimes get in the way. Yes there are greedy millionaires out there for sure but I don’t think that’s the primary reason the middle class or upper middle class feel stretched. It’s the hiearchy of needs…At one income level, feeding and clothing your child at a minimum is the driving need, at higher levels where that need has been satisfied, now sending your kids to the best schools becomes a “need” as you try to give them the best chance to make it in life.

Guest Again

I agree with you that the greed/hierarchy dynamic happens to most of us no matter our economic status or background, but the big picture (and reality) is that a poor person actually IS poor, while a wealthy person actually is NOT. The fact that they tend to “forget” that is fascinating yet still absurd. Either group spending outside of their limits gets no sympathy from me. It’s not so much human nature as it is human choice. Yes, it’s a tendency (plus the good ol’ fashioned mass mentality), and a very bad one.

Laura Kirkland

Great article. I have always been fascinated by the psychology of greed and the psychology behind wealthy people who feel or act poor. I have seen extreme cases, such as the Beales (Grey Gardens) and minor cases, such as people who have a hard time getting rid of things (not necessarily hoarding).

CrankyFranky

financial security is a feeling – in the Chinatown near me, a woman I’m told is one of the richest, owning several of the largest chinese restaurants in the area, stands out the front every night with a menu, jumping up to poke it in the face of passing strangers – the look on her face is so needy it scares me – although I’ve been introduced to her, I avoid her because her neediness gives me the shivers.

contrast that with a youthful friend who was a career ‘dole bludger’ (living on government benefits) – he bought a little old car, a tiny old caravan, and drove around the country with his partner for 6 months enjoying life, registering in each coastal town to receive his welfare – living purposefully, enjoying life, on the smell of an oily rag.

I know which I’d prefer …

Catherine Lin

Well maybe the rich can feel poor sometimes but I think its better when the poor (aka middle to upper middle class in this economy) feel wealthy. The best way to feel wealthy, by having your financial house in order. To me this means putting away a solid portion of your income, saving to your 401k and roth account, and having downside protection in place like life insurance. These are not hard goals for anyone to accomplish (unless maybe you make minimum wage) as long as you structure your spending the right way. I use Etrade for my Roth account, get my 401k through work, and I have life insurance from Life Ant which only costs about $19 a month for my husband and I. Scared of insurance? Places like Life Ant or gnworth can insure you for about $20 bucks a month. You can sign up for all your own investment accounts, and you dont need to pay someone a lot of money (financial advisor) to tell you to save. America needs to be a little smarter financially.

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